RAMALLAH, June 10 (JMCC) - Twenty-five members of Israel's Knesset moved to pass a bill on Wednesday that would make it a punishable crime to initiate, encourage or aid a boycott against the state of Israel.

The bill was proposed by the Land of Israel lobby and supported by various members of factions, including Kadima party whip Dalia Itzik, and Defense and Foreign Affairs Committee Chairman Tsachi Hanegbi.

Israeli nationals found supporting a boycott would be forced to pay compensation to those harmed by their actions, while non-Israeli individuals would be banned from entering the country for 10 years.

Implicated foreign entities would be prevented from conducting any business in Israel, including the Palestinian Authority, and their funding would, under the proposed bill, be diverted to undermined Israeli companies.

The bill comes in the wake of increased official PA endorsement of a boycott of goods produced in West Bank settlements. The settlements have never been recognized under international law, and are cited as a major obstacle to the creation of a viable Palestinian state.

According to the Palestinian Authority, roughly $500 million worth of settlement-produced goods reach the occupied West Bank and Gaza Strip every year. Among the products that the Palestinian government is boycotting are pretzels made by Beigel Beigel, Ahava beauty products and the Barkan winery, as well as various agricultural products, including fruits, vegetables, eggs and flowers.

Israel has responded angrily to the boycott. Speaking a few weeks ago, at a Likud faction meeting, Prime Minister Benjamin Netanyahu stated that, Israel aspires to economic peace. We have removed checkpoints, eased the lives of Palestinians and are working all the time to advance the Palestinian economy. Despite this, the Palestinians are opposing economic peace and are taking steps that in the end hurt themselves.

Even among the Palestinians, the move is seen as controversial. The new Palestinian law, passed in April, states that anyone who deals in goods produced in the settlements will be imprisoned for two to five years and fined up to $15,000. Those who import settlement products into the Palestinian territories face three to six years jail time, fines of up to $3,000 and confiscation of licenses and vehicles.

The proposed boycott of settlement jobs in particular has been criticized, with many pointing to the government's inability to provide equally well-paid jobs for workers. The settlements currently employ around 25,000 Palestinians.

Nonetheless, Israel's strident reaction means that the boycott must be having some effect. The Washington Post reported earlier this month that at least 17 businesses in the Israeli settlement of Ma'ale Adumim have closed down since the boycott began.

We are definitely committed to a path of non-violent resistance and defiance in the face of the settlement enterprise, and we are defiantly expressing our right to boycott those products and I believe it is working, said Palestinian Prime Minister Salam Fayyad. We will continue to do more.

Israel is also reacting to increased international participation in the Boycott, Divestment and Sanctions (BDS) movement. A total boycott of economic, cultural and academic goods from Israel is based on the measures taken against the former apartheid regime of South Africa.